President Donald Trump meets with Chinese President Xi Jinping at the beginning of their bilateral meeting at the G20 leaders' summit in Osaka, Japan, June 29, 2019.
Kevin Lemark | Reuters
President Xi Jinping sent a strong signal this week that Beijing is willing to work with US President-elect Donald Trump to resolve trade disputes amid the risks of a potential trade war.
in Letter to the US-China Business Council Xi said on Thursday that the two sides should “choose dialogue rather than confrontation, and win-win cooperation rather than a zero-sum game,” while reaffirming his commitment to opening the Chinese market to foreign companies, including American companies.
These statements were repeated in his speech in A Tuesday meeting with visiting presidents From major international economic organizations, he said, “There will be no winners in the tariff wars, the trade wars, and the technology wars,” according to a CNBC translation of his speech in Chinese. Xi called on the two sides to maintain dialogue and manage differences.
Kenneth Jarrett, president of the American Chamber in Shanghai, said the wave of messages from Beijing reflected a “sense of concern” and that “these overtures occurred in a very public way.”
“This may mean that the Chinese authorities lack channels to communicate with the new Trump team… and that Beijing believes there are political benefits in projecting a public image of willingness to work with the new US administration,” Jarrett added.
A trade war looms
Shen Ming, director of Beijing-based investment bank Chansun & Co., said Trump's policy stance of putting America first poses a “huge threat” to Chinese policymakers, who already face the daunting task of reviving the faltering economy.
Trump, who is scheduled to take office next January, did so He pledged to impose an additional 10% customs duty. on all US imports of Chinese goods. Trump had threatened during his election campaign Imposing customs duties exceeding 60% On China.
Earlier this month, the Joe Biden administration announced He announced broader restrictions on US exports From advanced memory chips and chip making machines to Chinese companies. The next day, Beijing responded Banning the export of many rare materials Used in semiconductor and military applications.
Daniel Balazs, a researcher at S. College, said: Rajaratnam International Studies: “China has made clear that despite this commitment to growth and constructive trade relations, it will not back down in the face of US pressure, if it comes to that.” .
Earlier this week, China's market regulators It announced that it had opened an antitrust investigation In the powerful American chip company Nvidia. The company has been banned from shipping its most advanced chips to China, but is still selling less advanced chips and processors to Chinese companies. It amounted to 15% of its revenues In the October quarter.
However, the two sides are likely to try to reach an agreement through negotiations over the next few months, rather than forced implementation of massive tariffs, experts say.
Sam Radwan, president of Enhance International, told CNBC there could be “some tariffs” but they would likely be “closely coordinated and not too sudden, too large or too disruptive.”
exports It was a rare bright spot With China's faltering economy, companies are rushing to ship to the United States before higher tariffs take effect, but once stronger tariffs are imposed, China's exports will also face a slowdown.
President Xi confirmed on Tuesday that he had done so “Complete confidence” to achieve it This year's growth target, he described the country as “the world's largest engine of economic growth.”
Initiatives but not surrender
Earlier this week, Trump called, CBS reported The Chinese President will attend his inauguration ceremony next month.
Derek Scissors, a fellow at the American Enterprise Institute, said Beijing was trying to avoid “any appearance that Xi is unfriendly by not attending the inauguration.”
CBS reported that there was no precedent at all for Chinese leaders to attend the US inauguration, which is usually witnessed by Chinese ambassadors.
China spokesman The Ministry of Commerce told reporters In a regular press conference on Thursday, he stressed that China has maintained close contacts with its American counterpart, and that it is open to continuing communication with incoming economic and trade officials under the Trump administration.
Gabriel Wildau, Teneo's managing director, said that while the Chinese government is trying to show that it is willing to negotiate with the incoming Trump government, that “does not necessarily indicate that China is ready to make the kind of concessions” that Trump is seeking.
One example of such concessions that China could make is to promise more stringently Oversight of fentanyl tradeScissors added.
He added: “In a darker scenario where escalation continues, Beijing could point to these early statements to show the rest of the world that Washington is the side that has rejected cooperation and compromise.”
